Indian Oil Corp Clinches $3-Billion Gas Deal in Iran
Hindustan Times
November 1, 2004

Tehran: In its biggest ever investment abroad, Indian Oil Corporation has clinched a $3 billion deal to develop a gas block in the gigantic South Pars gas field of Iran and sell LNG from it. IOC will partner Iran's Petropars in bringing to production one of the 30 phases planned to develop the 500 sq mile south Pars field that is estimated to hold 436 trillion cubic feet of gas reserves, officials said.

The two will also put up a liquefaction plant in south Iran which is designed to make available nine million tonne per annum of LNG to be exported to India and other countries.

"The deal will be formally signed after it is approved by the Iranian authorities," an official said, adding that IOC director (business development) Naresh K Nayar and Petropars chairman Akbar Torkan are tying up loose ends.

The Indian company will have 40 per cent stake in the upstream development with the remaining being with Petropars. In the liquefaction plant, IOC would have 60 per cent stake and the marketing rights to sell the entire nine million tonne of LNG.

Petropars is a subsidiary of National Iranian Oil Co. The NIOC has 60 per cent stake in Petropars while Iran's IDRO (Industrial Development and Renovation Organisation) Pension Fund has the remainder.

The South Pars gas block is near the Yadevaran oilfield, in which Tehran has offered 20 per cent stake to New Delhi in lieu of India buying five million tonne per annum of LNG. Yadevaran oilfield is said to have a potential to produce 300,000 barrels per day.

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